Is Obamacare still casting cloud over GDP? Probably

The government apparently is still trying to figure that out, at least when it comes to measuring how fast the U.S. economy is growing.

In the first six months of 2014, Americans supposedly spent less on health care, according to the second-quarter GDP report. Spending fell in the first quarter and rose slightly in the second quarter, but not enough to exceed how much Americans were spending at the end of 2013.

What’s more likely, economists say, is that the statisticians at the Bureau of Economic Analysis are having trouble adjusting for life after Obamacare.

“There is something wrong with the health care picture that we suspect is more likely to be associated with measurement issues than a decline in health care spending,” wrote analysts at Jefferies.

Government economists figured health-care spending would surge in the first quarter as the newly insured rushed out to get medical treatment. But evidently that didn’t happen.

The confusion contributed to the havoc with first-quarter GDP. The government initially said the economy shrank by 0.1%, based on an overly optimistic estimate of how much consumers spent on health care.

Later the BEA decided that health-care spending actually fell. That led to the decline in first-quarter GDP being revised down to 1%, then a whopping 2.9% and now a drop of 2.1%.

In the second quarter, the government estimated that health-care spending rose at an annual rate of $1.80 trillion, up from $1.78 trillion in the first quarter. That added 0.08 percentage points to GDP – far less than the 0.30% average during 2012 and 2013.

Even that number is probably suspect since it’s based on incomplete data. The BEA probably won’t have a better idea of how much was spent on health care in the second quarter until the early fall.